Brilliance Auto, BMW's partner in China, expects sales to jump 24.34 per cent this year to 200,000 units despite health concerns over its cars. Allegations about the use of cancer-causing car components have plagued BMW and its German rivals, including Audi and Mercedes-Benz, since they were raised by a media report earlier this month.

The company's chief executive Qi Yumin said the reports by China Central Television last week had not affected sales and stressed that vehicle component quality was standardised regardless of the markets. A quality control taskforce set up for the incident was still investigating the matter.

While BMW's contribution of net profit to the company continued to rise last year amid a 49 per cent increase in sales, Brilliance Auto saw a drop in revenue and gross profit margin as sales of the mainland company's own deluxe minibus models fell 14.4 per cent.

"We will introduce a high-end multi-purpose vehicle by the end of next year, which we expect should raise both our gross profit margin and the image of our minibus products," Qi said. But before then, he admitted the minibus sector would remain a liability to the firm's earnings.

Brilliance Auto saw net profit jump 27 per cent to 2.3 billion yuan (HK$2.84 billion) last year but it did not offer any dividend.

While growth in the mainland's luxury car sector slowed last year, the firm's chairman Wu Xiaoan said it would still be more than double the growth of the passenger car market, which is expected to range between 6.5 per cent and 7 per cent this year.

Although a recent Beijing policy saw many luxurious car brands taken out from the list of official government cars, Qi said the impact should be minimal as Brilliance Auto would continue to expand sales channels and its customer base. It is understood the firm is set to launch a new product line that is more affordable and will add 60 more dealerships this year to bring the total to 420.

With two new production and assembly plants starting up last year, the company said it would now focus more resources on sales and marketing. Expenses on this front jumped 40 per cent to 387.7 million yuan last year.

The company's share price edged up 0.2 per cent to close at HK$10.26 yesterday.

This article appeared in the South China Morning Post print edition as Brilliance Auto expects sales to soar